Is Narendra Modi government’s bounty overstated?

When Deepali Mandal, a resident of Manikchak area in Malda district of West Bengal, signed up for the Pradhan Mantri Ujjwala Yojana (PMUY) last year, she was asked to pay upfront a sum of Rs 1,750 for a liquefied petroleum gas (LPG) connection. Mandal, who has a family of five, could afford to pay, despite belonging to the below-the-poverty-line category. However, when Maya Devi from Kotputli in Rajasthan was asked to pay Rs 1,500 for an LPG connection, she was unable to pay the amount and opted for the equated monthly installment scheme offered.

A person close to the implementation of PMUY said despite the scheme being designed for BPL women, around 50% of the beneficiaries are paying an upfront fee of around `1,500, which varies across states. Under the scheme, which finds prominence in most advertising material of the National Democratic Alliance government, of the around `3,100 cost of an LPG connection — including stove, refilled cylinder and safety hose — the government pays Rs 1,600 as one-time aid per connection. The rest is to be borne by beneficiaries. Either this can be paid upfront, or a beneficiary can opt for a loan, wherein the amount is realised by not repaying the beneficiary the amount of subsidy — transferred as a direct benefit to bank account — on subsequent refills till the loan amount is recovered. The process would require around 10 refills for the beneficiary to repay the amount.

The flagship scheme of the Narendra Modi-led government was launched in May last year and aims to provide LPG connections to 5 crore beneficiaries in three years to women belonging to the BPL category — as per the Socioeconomic Caste Census 2011 data — for which the government has earmarked a sum of `8,000 crore. As of today, almost 2.5 crore beneficiaries have received LPG connections and the scheme is now being pushed in the north-eastern states.

Sources said almost 80% of the beneficiaries have come back for refilling cylinders. However, the data is maintained with a three-month lag, considering beneficiaries take some time to switch completely to LPG use and need time to exhaust the first LPG cylinder they get with the new connection. While Mandal has gone for four refills since she receiving her connection in December 2016, Devi has gone for three refills since July 2016.

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The national average of LPG cylinder refills is around 7.6 per year, around one refill every 45 days. However, the refilling rate varies across states. “For instance, Bihar and UP have quite high refill rates, but forest areas in Chhattisgarh and Madhya Pradesh have low refilling rate of say two per year. This is because of easy availability of firewood,” said a source. Given the success of the scheme in its first year, the government now plans to extend the targeted beneficiary count to 8 crore and will seek additional `4,800 crore from the government, as reported by FE earlier.